# What’s Driving the Next Generation of Green Products?

- Link: https://greenlivingguy.com/2020/04/whats-driving-the-next-generation-of-green-products/
- Published: 2020-04-07T22:48:01-04:00
- Author: greenlivingguy

#### _**Capitalizing** on the power of consumer peer pressure to develop new sustainable products.  _

If you purchased a Toyota Prius or a Tesla you may have been driven by the desire
to conserve. Conserve for the environment or to save yourself some money at the 
gas pump.  But consumers may also choose to buy sustainable products. Sustainable
products which make themselves appear socially responsible to others. Before making
purchases, they evaluate how their decisions will stack up against their peers.’
That’s according to a study.
 [⌊Toyota Prius is considered a sustainable product⌉](http://i0.wp.com/greenlivingguy.com//srv/htdocs/wp-content/uploads/2016/05/wp-1463533058286.jpeg?w=528)

The study called, [“Social Responsibility and Product Innovation,”](http://faculty.haas.berkeley.edu/giyer/index_files/srpaper_nov2015%20(1).pdf)
forthcoming in_ Marketing Science. _

It examines how understanding this phenomenon, known as “conspicuous conservation,”
may help leading companies shape their product innovation strategies toward sustainable
products. Especially in ubiquitous product categories such as cars.

_The design of the Prius or the Tesla Frankly get noticed by other people on the
road. Also, consumers care about what people see themselves in. It’s the value that
I get from [driving an electrified](https://greenlivingguy.com/2023/08/genesis-g80-electrified-test-drive-results/)
car. It may depend upon how many other people in my social circle are also driving
[environmentally friendly cars](https://greenlivingguy.com/2020/12/eco-world-how-popular-are-eco-friendly-cars-worldwide/).
The value is higher if I’m the only one,” says [Ganesh Iyer](https://web.archive.org/web/20170704183713/http://facultybio.haas.berkeley.edu/faculty-list/iyer-ganesh/),
a professor in the Marketing Group at UC Berkeley’s Haas School of Business, and
one of the study’s authors. _

_So if you or your social circle who is driving a gas-guzzler, there will be pressure
to conform._

[⌊BMW i8 is considered a sustainable product⌉⌊BMW i8 is considered a sustainable
product⌉[

#### The paper is co-authored by David Soberman of the University of Toronto’s Rotman School of Management.

Refraining from buying a product that damages the environment can generate social
value for consumers. This need by consumers to measure up to their peers. It’s a
concept called social comparison preference. It can provide marketers with valuable
insights. Insights about how they can enhance the desirability of their products.

[⌊Chevy Volt⌉⌊Chevy Volt⌉[

_“We are trying to capture this issue of social comparison in markets, which is 
important for visible products like cars and clothing,” says Iyer. “Making a product
better on a social or environmental dimension is not the same as simply improving
its quality. For it is about leveraging social comparison preferences.”_

### 󠀁[⌊image⌉⌊image⌉󠀁[

The researchers from Berkeley’s Haas School of business developed a model linking
the R&D decisions of firms to the interplay of consumers’ social comparison preferences(
their need to stack up) and how much they are willing to pay. The analysis shows
that social comparison can provide incentive. Incentives for a company to develop
innovations in sustainability when the product category is mature and most consumers
are already users of that category. In the case of the Prius, for example, most 
consumers already drive.

Heightened media attention also helps green products become more socially valuable,
according to the research. For instance, as the media focused more and more on the
effect of palm oil production on deforestation, many consumer product companies 
started producing palm-oil free products.
 [⌊image⌉](http://i0.wp.com/greenlivingguy.com//srv/htdocs/wp-content/uploads/2016/04/wp-1459896101662.jpeg?w=528)

The paper also cites Levi’s WaterLess™ jeans and Clorox’s [Green Works](https://greenlivingguy.com/2013/07/hey-all-new-smart-ev-car-for-26-000-before-tax/)
cleaners as examples of innovative products developed to respond to consumers’ social
preferences. Levi’s spent three years developing a process to create denim that 
requires less water and fewer chemicals to produce, and Clorox spent over $20M to
produce eco-friendly, natural cleaning products.

[⌊image⌉⌊image⌉[

Beyond the Label campaign

Finally, the research study’s findings, says Iyer, underscore the value for companies
to understand their consumers’ preferences. Especially with respect to social responsibility.
Finally and to use that understanding in determining long-term innovation and product
strategies.

[⌊Console of BMW X5 PHEV⌉⌊Console of BMW X5 PHEV⌉[

[University of California, Berkeley’s Haas School of Business](https://haas.berkeley.edu/)
[@Haas4Media ](https://web.archive.org/web/20160516122010/https://twitter.com/Haas4Media)

[See their Media Guide to Haas Faculty Experts.](https://web.archive.org/web/20181004014943/http://www.haas.berkeley.edu/forthemedia/faculty_experts.html)